Cave diving for Dollars

As I’m sitting in Buenos Aires eating one of the guiltiest pleasures known to man, a Chips Ahoy alfajor, I can’t help but think that my little trip to the corner store for a bottle of water, a soda, a bag of chips and said alfajor cost me $40 pesos. When I used to live in Buenos Aires longer ago than I’d like to admit, the same trip might have put me out $10 pesos, $15 maximum. So what does that mean? For the average Argentine, this means inflation of 300% in nine years time.

There’s nothing new about inflation in Argentina, and although we can’t get specific on what the exact figure is, everyone knows it’s at least twice as high as the 11% advanced by the country’s official statistics board. But what is new over the past year is that economics has worked its magic and brought the effective cost to me, with my greenbacks, back down to near the amount I paid nine years ago.

This is not because of a favorable exchange rate, or a great appreciation in the dollar. Instead it comes from the parallel market (and parallel universe) that has cropped up in Argentina, where those with dollars can change with private individuals at a 80% 90% premium over the official rate, and buy that many more alfajores.

The dolar blue, as it is denominated, is a market-based, unofficial currency that trades in informal currency exchange houses called “cuevas” (caves). You can’t get these dollars from ATMs or from official exchange houses. Instead, you have to hold your nose and hope that one of the many characters yelling “cambio” on the equivalent of Buenos Aires’s Broadway won’t trick you or rob you, and the police won’t catch you in the meantime. But once you get them, that $40 peso alfajor run costs US$4.30 instead of the US$7.75 it would cost at the official exchange rate.

Since Argentines are an inherently creative people, there are more than a dozen exchange rates that have cropped up based on the way you’d like to circumvent the restrictions. Want to go to Uruguay and sell pesos there? Check. Want to go to Chile and get a cash advance in dollars? Check. Want to buy Macy’s gift cards online at the official exchange rate and then sell them for dollars abroad or go shopping in Miami? You got it.

Sometimes I have a hard time in Argentina understanding how everyone can tolerate illegal activity hiding in plain sight, or how the will to enforce or defend laws also derives from one’s own political views. But that’s nothing compared to my utter inability to understand how the national government can be so nonchalant about the fact that their currency is no longer convertible, their dollar controls are increasingly desperate (they have to use cash-sniffing dogs on the border), and even the dogs see a devaluation ahead.

Nobody has accused Cristina Fernández recently of being a reasonable person, even humble President Mujica of neighboring Uruguay was caught recently on a live mike commenting “esta vieja es peor que el tuerto – this broad is worse than her one-eyed husband”. Cristina and her economic alchemists sneer at these bourgeois problems of finding dollars and saving money in foreign currencies, but sooner or later the market always prevails. Meanwhile, I’ll be scooping up bargains.

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2 responses to “Cave diving for Dollars

  1. Pingback: Miami without a car | Avenida América·

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